It's still no fun to be an airline operator.
That was the short version of the update that American Airlines gave investors this week as the company reported a $780m operating loss for the last quarter of 2021, which we've visualized above.
The grass was greener
That is the 8th quarterly operating loss that American Airlines has reported in a row — a far cry from the 31 straight quarters of operating profits that the airline reported from 2012 to 2019.
The impact of the pandemic can't be overstated. Passenger numbers are still down 20-30% relative to 2019, depending on the day, and although some costs (like aircraft fuel, landing fees and maintenance) have come down, it's been nowhere near enough to compensate. Salaries and wages or the depreciation of assets that are getting older, are a lot harder to quickly reduce.
The latest thorn in the airline's side has been crew cancellations (due to COVID-19) and bad weather. Over the 2 weeks starting Dec 25th, American Airlines had to cancel almost 1,500 flights.
The missing puzzle piece
Despite a tough start to the year, the company is optimistic about 2022, expecting capacity to be down only about 5% from 2019, but with one major question mark: corporate travel.
Justifying getting on a plane for a meeting is a lot harder than it used to be — and that's a problem for the airlines because corporate travel used to make up~40% of revenues. That's a big piece of the puzzle... and it's probably going to be missing for a while.
